Reynolds American Inc. said this morning that 400 manufacturing workers will leave the company starting in January, having accepted a recent severance package offer.
The company said it would take a charge of about $47 million in the fourth quarter of 2009 in
connection with the severance and related costs for about 400 R.J. Reynolds Tobacco Company
employees.
The employees who will be leaving the company asked for the package, which was offered two weeks ago when the company said it was looking to reduce its manufacturing staff. There are currently 1,800 employees at the tobacco's company's Tobaccoville and Whitaker Park plants.
The cuts would leave 1,400 jobs at the plants.
R.J. Reynolds last offered production associates severance packages in 2003. The company said job eliminations would begin in January, with most completed in 2010; a few
employees will have release dates in early 2011.
"This is a win-win situation for both employees and the company," Tommy L. Hickman,
senior vice president of operations for R.J. Reynolds, said in a statement. "No jobs were eliminated unless an
employee asked that they be considered for elimination, and we were able to accommodate
the wishes of every employee who asked to be considered."
"The company benefits from additional streamlining that will better align our staffing level with
business requirements and enable our manufacturing operations to phase in new productivity
programs over time," said Hickman.
R.J. Reynolds expects to achieve cost savings of
about $17 million in 2010, which will increase to about $30 million in 2011,
as a result of the headcount reduction.
Hickman said employees leaving the company will receive two weeks of pay for every year of
service, up to a maximum of 78 weeks, along with other retirement- and benefits-related
payments.
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